Confirming What Your Senses Tell You

The official unemployment rates (U3 and U6) no longer measure all of the unemployed. The Clinton administration ceased counting as unemployed workers who had given up looking for a job for one year or longer. No discouraged workers are included in the widely reported U3 measure. The U6 measure includes workers who have been discouraged for less than one year.

In other words, the longer an economy is in the doldrums, the less the official unemployment rates are reliable measures of the extent of unemployment. The unemployment rate in December as measured by U3 is 8.5%; as measured by U6 which includes short-term discouraged workers (less than one year) is 15.2%. John Williams’ measure which includes the long-term unemployed is 22.4%.

In other words, the real unemployment rate is 2.6 times the widely reported U3 rate, which is the rate emphasized by policymakers and the financial press.

  Paul Craig Roberts

This is simply business “the way it’s done.” Any time any group or organization is charged with providing numbers, they simply adjust (revise) the way they count to fit what they want to say. It’s also used in scientific research – gather your numbers and then decide which statistical analysis to use to make them seem to be saying what you would like them to say. Of course, you can use this in combination with adjusting the parameters for your count.

...but hey, do what you want...you will anyway.